How to Word a Recording Contract
Drafting a business contract can be deceptively difficult because of the legal nuances involved. Recording artists often have little knowledge of contract law, and thus are at a particular disadvantage when negotiating recording contracts, especially when the record label has experienced attorneys at its disposal. Nevertheless, a rudimentary understanding of contract drafting as it applies to the recording industry should mitigate this disadvantage.
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Instructions
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Download a sample recording contract (see Resources section). This will familiarize you with some of the issues that you will need to deal with.
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Identify the parties to the recording contract by their legal names in the first section, and state the purpose of the contract in general terms. You should also record the date that the contract will become effective.
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Draft a "term of contract"section that sets the term of the contract at no more than three years. This is especially important if you are dealing with a small record label, because some record labels are unable to effectively promote their artists' work. You might want to specify that the contract is automatically renewed for successive one-year terms unless one party notifies the other in writing no later than 30 days before the term ends.
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Draft a royalties section that entitles you to at least 5% of gross domestic and foreign sales. Some artists are able to command as much as 10%. Keep in mind, however, that there is likely to be an inverse relationship between the amount of your royalties you negotiate and the size of the advance that you will be able to secure.
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Draft a section that entitles you to an advance that is at least enough to cover your production expenses. An alternative would be to specify that the record label must cover "reasonable production expenses." Many record labels will not agree to such a clause, and others will want the contract to specify exact amounts.
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Draft a promotions standards section that details exactly what the recording company must do to promote your work. This section will likely contain several provisions. If possible, specific numerical standards should be established. This section should contain a clause allowing you to terminate the contract if the record label fails to meet these standards.
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Draft a provision that entitles you to ownership of the master recordings of your work after the contract expires or is terminated for any reason (including breach by you).
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Add contractual housekeeping provisions such as dispute resolution and governing law. Arbitration is likely to be more affordable than courtroom litigation, which should work to your advantage if the record label has greater financial resources than you do. The governing law should have a strong relationship to the subject matter of the contract--the jurisdiction where the contract is to be performed, the jurisdiction where the recording company's head office is located, and the jurisdiction under whose laws the record label is organized are all appropriate.
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Add a signature section. Make sure that the representative signing on behalf of the record label is identified by name and title.
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Tips & Warnings
Eliminate unnecessary wording from the contract. Legal writing should be crisp, clear, to the point, unambiguous, and free of "legalese."
It is best to have an attorney look over the final contract before you sign it--some contractual wording can have unintended legal consequences.
